Nebraska Supreme Court Rejects Challenge to Lending Measure

The Nebraska Supreme Court on Friday rejected a challenge to a payday lending measure on the November ballot. Supporters of the measure, which would cap the annual interest rate on payday loans at 36%, gathered enough signatures to place the proposal on the Nov. 3 ballot. However, a lawsuit argued that when circulators gathered petition signatures, they didn’t read the initiative’s full object statement to signers.

A Lancaster County District Court judge dismissed the challenge in September, finding affidavits from 188 signers missed a deadline. The judge also found that while the signers claimed circulators hadn’t read the initiative’s full object statement, the law only requires signers by offered a summary of the petition that isn’t misleading. The Nebraska Supreme Court affirmed the district court decision. The court earlier allowed the initiative to go before voters, and many people already have cast early ballots on the question.

If approved by voters, the limit would change a Nebraska law that now allows lenders to charge as much as 404% annually. Supporters of the measure say such high rates victimizes low-income people and those who don’t understanding lending requirements. Industry officials responded that most loans are short-term, so such high rates are misleading.